Commerce Uber Alles

...Churchill and Chamberlain were both members of the Conservative party, but they sprang from very different intellectual traditions...

...The same spirit emanates today from the U.S...

...senator Phil Gramm's intention to loosen export controls on "dual use" products...

...This is the pattern seen in the 1930s...

...commercial ties to the Third Reich...

...Corporations adapt, keeping all eyes on the money prize and doing whatever they must to protect their investments...

...and senator Fred Thompson's effort to punish private firms (not just governments, as under present law) for contributing to the proliferation of weapons of mass destruction...

...The appeasers wanted not only to liberalize trade, but also to stimulate the German economy...

...And repeatedly, history has pointed to a great lesson: that private firms cannot be trusted to police their own dealings so as to avoid strengthening potential adversaries...

...American businessmen, they argue, assisted Hitler because they were "bound by identical reactionary ideas . . . [and sought] a common future in fascist domination, regardless of which world leader might further that ambition...

...Their hopes, and those of Chamberlain and Ashton-Gwatkin, of course, were dashed...

...In 1938, Henry Ford accepted the Grand Cross of the German Eagle, the Reich's highest honor for foreigners...

...The list of other American companies operating in Germany or the occupied countries during the Hitler era is a long one, and it includes such leading firms as Standard Oil, Chase Manhattan Bank, RCA, and General Motors...

...Higham and other left-wing writers offer a conspiracy theory to explain U.S...

...Strategic programs put on hold in the 1970s and 1980s due to technical difficulties have been resurrected due to increased access to foreign technology and expertise...

...The 1930s present an exceptionally powerful demonstration of this rule...

...Commerce Uber Alles When national security and profits collide, you can trust businessmen to be businessmen BY WILLIAM R. HAWKINS Down through the centuries, trading nations have confronted the task of reconciling their commercial interests with national security—a task the United States faces with regard to China...

...governments come and go...

...Nevertheless, business interests and the libertarian activists they finance work hard to prevent government from enacting measures that would interfere with profit-making, whether in the domestic or the international areWars, revolutions, and elections make little difference...

...The Reich's trade surplus with the British Empire was a help here, providing Berlin with sterling to finance imports...

...Private British banks were making loans to German industry right up until the outbreak of war...

...On January 30, 1939, Hitler proclaimed to the Reichstag yet another "export battle" to raise foreign exchange...

...Some people didn't have to wait for the full shock of Nazi aggression to see where appeasement was heading...

...or) by Hitler for his contributions to German industry...

...Featured sponsors in addition to the Chamber include Amway, Cisco Systems, FedEx, New York Life, CNA, and United Airlines, all of which do business in China...

...Business and Industrial Council Education Foundation...

...Winston Churchill realized the rising economic strength of Germany was being converted into military power and diplomatic influence...

...As these commercial ties have expanded, Beijing's view of the United States has not softened...

...Chinese officials, however, use the platform to discuss political issues...

...In reality, the view from the boardroom is much more mundane, colored by a simple desire to do business regardless of politics...

...International Telephone and Telegraph worked to build and improve Germany's communications systems (including those on aircraft and warships), radar, sonar buoys, and artillery fuses...

...Wars, revolutions, and elections make little difference...

...Instead, they were guided by a notion that has surfaced again today in certain circles: the view that one has less to fear from economically strong states than from weak ones...

...Against that backdrop, this year's congressional agenda includes a string of issues that will test Washington's resolve...

...The relationship began in 1933 as Hitler came to power and continued well into World War II...

...As a Federation of British Industries memo stated at the time, "Captains of industry had long recommended that meetings of businessmen . . . might perhaps be a suitable means of bringing about a return to common sense...

...Chamberlain was, in the words of Kenneth W. Thompson, "the archetype of bourgeois conservatism . . . [which] is derived from a decaying liberalism under whose colors the businessman in the nineteenth century achieved his now precarious eminence...

...Ashton-Gwatkin wanted to form an Anglo-German economic bloc, beginning with a "reduction of customs barriers," that would provide "the key to European peace...

...A 1936 memo from a London banking house quoted in The Appeasers, by Martin Gilbert and Richard Gott, speaks of "Nazi moderates"—Germans with whom the bankers thought it possible to "come to an understanding and cooperate" so as to avoid another war...

...The Chamber claims the tour is "about the many opportunities for doing business with China...

...If an ideology was at work here, it was classical liberalism...

...Thompson's conclusion, in Winston Churchill's World View, is that this "Tory tradition, . . . having suffered less disillusionment and dismay over the abrupt and violent reappearance of barbarism and violence, was better able to meet the threat by organizing resources of power against predatory foes...

...If businessmen do have a social responsibility other than making maximum profits for stockholders, how are they to know what it is...

...companies' giving technical aid to Beijing's long-range missile program and training its aerospace engineers, to Chinese telecom firms' installing fiberoptics of American origin in Iraq's air defense and military command-control systems...

...The rules are set by governments, because businessmen are incapable of knowing what is best for society...

...Even such strategic items as oil and ball bearings continued to flow to Germany from American companies during the war, through foreign affiliates and neutral countries...

...His economic absorption of Austria in 1938 and of Czechoslovakia, with its very substantial armaments industry, in 1939 was a major factor in shifting the balance of power in Europe sufficiently to give Hitler the means to wage his lightning wars of 1939-40...

...By contrast, Churchill was a classical conservative, heir to a long aristocratic tradition of state-centered power politics and unending rivalry among nations and empires...

...Chamber of Commerce, USA*Engage, and other business groups convinced of the beneficial impact of commercial "engagement" with China, an approach they favor extending to states like Cuba, Iran, and North Korea...

...This scheme was popular among British businessmen, who formed an Anglo-German Society in 1935 backed by such major firms as Dunlop, Unilever, BP and the British Steel Export Association...

...In London, there was even discussion of a multilateral loan to Germany, comprising funds from Britain, France, Holland, and Belgium, to help Germany buy imports from the Balkans, thus stimulating trade, of which Britain expected a share...

...Of the 350,000 trucks used by the Wehrmacht as of 1942, roughly one-third were Ford-made...

...Thus, as tensions mounted in Europe in the late 1930s, the idea was increasingly put forward that transnational negotiations between industrialists should supplant talks between diplomats...

...IBM founder Thomas Watson was even awarded the Merit Cross (Germany's second-highest honWilliam R. Hawkins is senior fellow in national security studies for the U.S...

...As Mark A. Stokes noted in his report China's Strategic Modernization: Implications for the United States (published by the Army War College's Strategic Studies Institute), a "seemingly endless stream of critical technologies" is flowing into China and driving strategic modernization...

...Today, the same dangerous patterns have emerged again, but with even more impact...

...The facilities IBM had built in Germany continued to operate under private management throughout the war...

...national interests and values...

...England would become valuable to Hitler as a market for his exports—and would even endure a trade deficit to improve relations...

...Within the framework of supposed Anglo-German economic cooperation, the British conceded to Hitler predominance in these regions...

...In the 1930s, the world economy was in depression...

...ITT became a partner in Focke-Wulf, the aviation firm that built the Luftwaffe's best fighters, and its components were used in the V-1 "buzz bombs" that brought the blitz back to England in 1944...

...The economic appeasers saw their approach as an alternative to an Anglo-French alliance that threatened a return to the confrontational policies of 1914...

...and that no invisible hand keeps corporations aligned with their nation's objectives in security and foreign policy...

...As Milton Friedman stated in his influential polemic Capitalism and Freedom published in 1962, "There is one and only one social responsibility of busi-ness—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game...

...Stories abound of the growing alliance, from U.S...

...Germany would then mellow in outlook, produce fewer armaments and more consumer goods for export, and become a "normal" country...

...Edwin Black's recent IBM and the Holocaust: The Strategic Alliance between Nazi Germany and America's Most Powerful Corporation highlights how Hitler's regime used a new American technology—the IBM Hollerith punch card machine, a precursor to the computer—to organize slave labor and manage the death camps in which millions perished...

...The Nazis refrained from seizing the corporation's assets during the war because of its close ties with the regime...

...IBM leased its machines to the regime, trained German officials to use them, and became the sole source of the billions of punch cards Hitler needed...

...Currently, the Chamber of Commerce is sponsoring a 10-city exercise in private diplomacy, dubbed "A National Conversation with the Chinese Ambassador...

...Among them are the renewal of the Iran-Libya Sanctions Act...

...What is disturbing here is not that business follows a self-serving agenda, but that governments go along with it...

...indeed it felt compelled to be extra cooperative with the regime in order to prevent the confiscation of its assets...

...Churchill understood that it was folly to increase the resources available to a regime whose foreign policies were inimical to those of his own country...

...The Reich entered into a series of trade agreements with Yugoslavia, Hungary, and Romania that made those countries dependent on Germany as a market for their raw materials and agricultural products—and helped pull Hungary and Romania into the Axis alliance...

...As for what course the Bush administration will steer, that remains to be seen...

...If Hitler felt secure, the appeasers argued, he would have no reason to use force...

...Even so, Chinese officials constantly call on Washington to further relax restrictions on technology exports, just as they encourage foreign corporations to set up research and development centers in China and to invest in the country's high-tech industries...

...Yet IBM was scarcely alone among American corporations in contributing to the building of Germany's police state and war machine...

...plans to build a national missile defense system, warned America away from closer ties with Taiwan, and defended the suppression of the Falun Gong meditation movement...

...1. Strategists writing in the publications of the People's Liberation Army openly discuss war with the United States—and not just over Taiwan...

...Apparently businessmen forget everything they know or think about the wider world on their way to the office...

...And Germany's economic dominance of Eastern Europe eased both problems...

...IBM did nothing to stop any of these activities...

...Because a major part of IBM's business was to service and supply these machines, some at IBM knew that the company's products were located in concentration camps or used to organize the railroads and manage war industries...

...He warned of Germany's growing capabilities, "with her factories equipped to the very latest point of science by British and American money...

...Chinese government pronouncements, stories in the state-run press, books, and interviews with officials routinely portray the United States as Enemy No...

...Now, the global economy is humming with capital flows, technology transfers, and joint ventures between American firms and foreign government entities—including those of regimes whose ambitions are clearly at odds with U.S...

...Ford-Werke was never nationalized, but only placed under trusteeship six months after Hitler declared war on the United States...

...According to historian Charles Higham's book Trading With the Enemy, Henry Ford's son, Edsel Ford, kept in contact with operations in Occupied France through neutral couriers and the Vichy puppet regime...

...To strengthen these ties after the outbreak of war in Europe, ITT put the Gestapo's number two man, Walter Schellenberg, on its board of directors...

...Ford also operated a large plant outside Paris, which, after the fall of France in 1940, started building trucks and aircraft engines for the German military...

...In 1938, prime minister Neville Chamberlain raised the issue of economic relations with Central and Southeastern Europe at the infamous Munich Conference...

...It kicked off at Denver in January and has since visited San Jose and Phoenix...

...In 1935, the British Foreign Office created the Economic Section, which became the vehicle for the state-sponsored commercial appeasement of Germany...

...Ford Motor Company set up shop in Germany in 1925, and six years later built the large Ford-Werke plant in Cologne...

...Corporations adapt, keeping all eyes on the money prize...

...In the 1930s, Germany was IBM's largest overseas market...

...The amount of international trade and investment was limited...

...Typical of this school was Frank Ashton-Gwatkin, head of the Economic Section of the Foreign Office, who wrote in 1936: "I myself believe, however, that this nearly mortal complaint [Nazism] will yield to the radioactive treatment of increased world trade instead of cutting out Hitlerism with a knife...

...Rather than moderate Beijing's ambitions, economic development is giving the regime the confidence to assert itself...

...asks Friedman...

...To tie so prominent and successful an American company as IBM to the roundup of European Jewry and the efficient execution of the Nazi genocide is to frame an especially shocking indictment of the "business as usual" corporate mentality...

...By 1941, however, Ford of Germany had stopped manufacturing passenger vehicles and was devoting its entire production capacity to military trucks...

...China poses the greatest problem, both because of its size and because of the enthusiasm American business has shown for developing Beijing's programs in aerospace, petrochemicals, computers, and telecommunications...

...And Americans were the largest class of foreign investors in bonds issued by the Third Reich during the 1930s to finance state projects, including rearmament...

...With a certain arrogance, the business lobbies assume that private corporations are superior to the state—even in the conduct of foreign policy...

...Other goods obtained from Eastern Europe Germany dumped onto the world market to earn foreign exchange...

...China's ancient motto fuguo qiangbing—strong economy, strong army—is a bit of enduring wisdom shared by many nations and empires...

...What they failed to realize was that Hitler had his own ideas about how the world should work— ideas not based on classical liberal precepts...

...Yet the two major constraints on Germany's rearmament program were foreign exchange and raw materials...

...British leaders did not think of economics in these strategic terms...

...To Berlin, trade was merely a means to strengthen the national industrial base for war...

...Business lobbyists are gearing up on all these measures, and they are continuing their push to relax virtually all restraints on dealing with potentially hostile regimes—in a reprise of the 1930s that could be lifted straight out of Edwin Black's book...

...In Denver, Chinese ambassador Li Zhaoxing attacked U.S...